The Medicines Company (MDCO)

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The Medicines Company Inc

Q2 2010 Earnings Call

July 28, 2010; 08:30 am ET


Clive Meanwell - Chairman & Chief Executive Officer

Glenn Sblendorio - Executive Vice President & Chief Financial Officer

Michael Mitchell - Director, Communications & IR


Adnan Butt - RBC Capital Markets

Matt Duffy - BDR Research



Good day, ladies and gentlemen and welcome to the Medicines Companies second quarter 2010 earnings conference call. My name is Stacy, and I will be your conference moderator for today. At this time, all participants are in a listen-only mode, we will conduct a question-and-answer session towards the end of this conference (Operator Instructions).

I would now like to turn the presentation over to your host for today, Mr. Michael Mitchell. Please proceed.

Michael Mitchell

Thank you, Stacy and good morning everyone. Thank you for joining us to review The Medicines Company second quarter and first half, 2010 financial results.

I’d like to remind you that this call will contain forward-looking statements about The Medicines Company that are not purely historical, and all statements that are not purely historical may be deemed to be forward-looking statements, which involve a number of risks and uncertainties. Without limiting the foregoing, the words “believes”, “anticipates”, “plans”, “expects”, “estimates” and similar expressions are intended to identify forward-looking statements.

Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are identified in the company’s SEC filings, including on Form 10-K with the SEC on May 10, 2010. Copies of our SEC filings can be obtained from the SEC, or by visiting the Investor Relations section of our website.

I would also note that during the call we may refer to non-GAAP measures, which include costs associated with the Targanta acquisition last year, stock-based compensation expense, and non-cash income taxes. Please refer to the non-GAAP reconciliation tables in our press release.

I'll now turn the call over to Clive Meanwell, our Chairman and CEO. Clive.

Clive Meanwell

Thank you, Michael. We aimed to be leaders in acute and intensive care medicine worldwide and during the second quarter we made progress towards that goal. To time leadership we must deliver innovative products that create value for customers in leading market share in 2650 leading hospitals in the 25 countries in market segment we choose to compete in, and we must demonstrate high levels of productivity both in terms of knowledge and financial measures to enable sustainable growth.

When we reported our first quarter results on April the 28, I focused on three main themes for our business operations update. First a continued revenue growth based on demand for Angiomax and Angiox worldwide; second, moving forward our focus portfolios to six compounds in acute and intensive care medicine; and third improving the efficiency of our business as to say doing more with less,

Today reporting results for the second quarter and first heal of 2010, I’ll return to these themes. Hospitals worldwide continued their strong demand for Angiomax and Angiox. Second quarter net revenues of $110 million were our highest quality net revenues today. Net revenue for the first half year was $212 million.

In the United States net revenues for the second quarter were $104.1 million, up 9% for the first quarter and even up 6% from this time last year when customers bought in anticipation of a price increase. Today our prices are on aggregate a little lower that last year as reported during our first quarter call, but we more that made up for that with increased volume and sale.

We enjoyed one small increase demand from our operating unites in Europe, where volume and net sales increase by 55% and 45% respectively compared to the same quarter last year. Italy, France, Scandinavia, Benelux and the United Kingdome posed strong growth. Germany grew more modestly.

For the first half of the year revenue gains in our operating unite were 59% in volume and 58% in sales, the difference being accounted for by foreign exchange and price changes.

Our partner for Spain, Portugal and Greece group over there also posted strong growth with 164% increase to next revenue for the first half of the year. Overall despite modestly lower sales in Canada, Angiomax and Angiox international next revenue increased to $5.8 million for the quarter and to $11.4 million for the first half year, up 48% versus last year at this time.

While our international revenues are at present, still a modest portion of our worldwide sales, the demand growth rates show we are gaining traction and we look forward to continue growth in these markets, where Angiomax and Angiox already have assured exclusively until 2015.

The underlined value to our customers and to there patients is the key to increased demand. More and more PCI patients have been given Angiomax because of date and experience showing improvements in mortality leading and costs relative to alternative treatments. The major first quarter publication of comparative effectiveness data by Jeremy Rassen and his colleagues

Angiomax, because of data and experience showing improvements in mortality, bleeding and costs relative to alternative treatments.

The major first quarter publication of comparative effectiveness data by Jeremy Rassen and his colleagues [Marvid] in the European Heart Journal, which showed lower mortality, bleeding and length of stay with Angiomax, was followed in the second quarter by the publication of yet more real world comparative effectiveness data in JAMA by Dr. Steven Marso and colleagues from the Mid America Heart Institute.

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